Project cost more than doubled to Rs 10.64 lakh crore under Bharatmala Pariyojana: ICRA

The project cost under the Bharatmala Pariyojana (BMP)  programme has more than doubled to Rs 10.64 lakh crore due to the steep surge in input costs and an increase in land acquisition costs, ICRA said on Monday.

ICRA highlighted that pending cabinet approval for the revised cost of Bharatmala Phase-l has affected project awarding activities. In the first seven months of this fiscal year compared to the same period a year ago, project awarding plummeted by 48 per cent, declining to 2,595 kilometers from 5,007 kilometers.

The agency foresees a contraction of over 30 per cent in project awarding activity for FY2024.

Ashish Modani, ICRA's VP & Co-Group Head, mentioned that a significant portion of road awards in the last five years were allocated through the hybrid annuity mode (HAM) and engineering, procurement, and construction (EPC) routes, where the funding burden was on the Ministry of Roads and Transport and Highways (MoRTH). With the substantial cost escalation in the BMP, MoRTH has shifted its attention to BOT (Toll) projects, which place a lower financial burden on the ministry.

In terms of bidder participation, the average number of bidders for EPC and HAM projects stood at 15 and 8, respectively, while for BOT (Toll) projects, it remained below 5, as per ICRA's findings.

(With PTI Inputs)